South African Mega Merger: Mango, SA Express & South African Airways

The South African government has decided to discuss the merger all three of the nation’s airlines, South African Airways, low-cost carrier Mango and regional carrier SA Express. This merger would have clear benefits for all three airlines but would also come with some risks.

The merger would be between all three of the government-owned airlines. Photo: Simple Flying

What are the details?

The South African government is set to consider a major merger between its three government-owned airlines, as reported by Business Tech SA. The airlines on the table are:

South African Airways, the nations international and domestic flag carrier

SA Express, a regional carrier that links remote towns and cities, as well as some international destinations.

Mango Airlines, the countries low-cost-carrier

All three carriers are actually fully independent but are funded by the government. The new proposal, prepared by the Department of Public Enterprise, was presented to parliament last Wednesday the 11th of September.

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This is great news for South Africa Airways and SA Express, both of which have received government bailouts in recent months. SA Express ran out of cash in August and was forced to ground its entire fleet until the government provided an additional R300 million (20.5 million USD).

What are the benefits?

For one, only having one corporate structure for all three airlines will be a huge cost-benefit for the government. They will need to pay fewer wages (with fewer executives), maintenance can be combined, and each airline can borrow capacity from another if needed.

Additionally, with a bigger fleet and more market presence, the airline will have more power to negotiate a better deal with suppliers. This could lead to a reduction in costs and a renewed focus on getting out of debt.

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Speaking about the possible merger to Business Tech SA, interim CEO of SA Express Siza Mzimela mentioned she “fully supported the integration of the airlines, but what is of critical importance is how the merger is put together”

Journalist - Working in news media for over a decade with outlets including 9News and the Discovery Channel, Nick is an airline marketing specialist with a Masters level education. Working closely with AirAsia, Virgin Australia, Turkish Airlines and others, Nick provides unique insight and analysis on a variety of aviation topics. Based in Sydney, Australia.